Smart contracts are self-executing programs stored on a blockchain that automatically enforce and execute agreements without intermediaries. These contracts are written in code and run on decentralized networks, ensuring transparency, security, and efficiency. Smart contracts power decentralized applications (DApps) in Web3, enabling trustless transactions across industries like finance, supply chain, and digital identity.

How Smart Contracts Work
Smart contracts operate autonomously based on pre-defined conditions written in code. When triggered by an event (e.g., receiving payment, verifying identity), they execute predefined actions without human intervention. Key components include:

Blockchain Execution: Smart contracts run on decentralized blockchain networks, ensuring transparency and immutability.
Automation & Trustlessness: Transactions are executed automatically when conditions are met, reducing reliance on intermediaries.
Security & Immutability: Once deployed, smart contracts cannot be altered, preventing fraud and manipulation.
Decentralized Finance (DeFi) & NFTs: Smart contracts enable financial services, tokenized assets, and NFT marketplaces.
By eliminating third parties, smart contracts increase efficiency, reduce costs, and improve security in digital transactions.

Why Smart Contracts Matter
Smart contracts revolutionize traditional processes by enabling:

Decentralized Finance (DeFi): Automates lending, trading, and payments without banks.
Supply Chain Transparency: Ensures traceability of goods and logistics automation.
NFTs & Digital Ownership: Verifies asset ownership and automates royalty payments.
Identity Verification: Secures digital identities and access management.
Their ability to create secure, automated, and trustless transactions makes smart contracts essential for blockchain ecosystems.